As a step further towards protecting customers from theft of data or money, the Reserve Bank of India (RBI) has asked all banks and white-label ATM operators...

As a step further towards protecting customers from theft of data or money, the Reserve Bank of India (RBI) has asked all banks and white-label ATM operators to ensure that all their automated teller machines (ATMs) in the country should be able to process EMV chip and PIN transactions by September 30, 2017.

Unlike the magnetic stripe technology, the EMV chip and PIN technology enables dynamic authentication and thereby mitigates the risk of data theft, since card thieves can easily duplicate cards with a magnetic stripe using simple card reading devices. Many point of sale (POS) devices across the country are now using this technology, which is why one can often see that the card need not be swiped any more but only partially inserted from the bottom of the device.

“While the POS (point of sale) terminal infrastructure in the country has been enabled to accept and process EMV Chip and PIN cards, the ATM infrastructure, on the whole, continues to process the card transactions based on data from the magnetic stripe. As a result, the ATM card transactions remain vulnerable to skimming, cloning, etc. frauds, even though the cards are EMV Chip and PIN based”the RBI said in a notification on Thursday.

In May 2015, the regulator had issued a notification asking banks to make sure that all cards issued on or after September 1, 2015 are EMV chip and PIN cards. In response, many banks asked for an extension of time to meet the regulator’s directive and were given time till January 31, 2016. For accounts being opened under the Pradhan Mantri Jan Dhan Yojana, the time limit was extended to September 30, 2016.

“It has, therefore, become necessary to mandate EMV Chip and PIN card acceptance and processing at ATMs also. Contact Chip processing of EMV Chip and PIN cards at ATMs would not only enhance the safety and security of transactions at ATMs but also facilitate preparedness of the banks for the proposed ‘EMV Liability Shift’ for ATM transactions, as and when it comes into effect,” the RBI said.